Happy Forgings Limited Q1 FY25 Earnings Conference Call Summary
Financial Performance Highlights
• Total Revenues: Rs. 341 crores
• EBITDA: Rs. 98 crores
• PAT: Rs. 64 crores
• Year-on-Year Revenue Growth: 7% (adjusted)
• EBITDA Margin: 28.6%
• PAT Margin: 18.7%
Market Challenges and Future Outlook
• Current Challenges: Temporary slowdown in infrastructure spending and decline in certain vehicle production volumes.
• Optimism for Growth: Driven by capacity expansions and increased passenger vehicle segment contributions.
• Machining Capacity Plans: Significant additions expected in upcoming quarters.
Q&A Session Highlights
• Passenger Vehicle Revenue Share: Confidence in increasing share to 8-10% with significant orders secured, including Rs. 150 crores from North American clients.
• Export Strategy: Anticipated growth in North American exports despite current declines in the European market.
• Domestic Commercial Vehicle Market: Potential recovery expected in H2, with optimism about new North American projects.
• Critical Components Approval: Approvals received for genset crankshafts, with ramp-up expected in Q3.
• Future CAPEX Needs: Estimated at Rs. 200 crores for the current and next year, with a focus on passenger vehicles.
• New Customer Acquisitions: Significant order for E-Axle components from a North American client.
• Limited Railway Component Exposure: Acknowledged, with ongoing efforts in defense and aerospace.
• Growth Targets: Confidence in achieving double-digit growth despite industry challenges.
• Heavyweight Forged Products: Active projects and exploration of demand for larger parts.
• Defense Segment Opportunities: New team formed to explore artillery requirements.
• CAPEX Funding: Plans to rely on internal cash accruals, with potential debt for a solar project.
Conclusion
• Emphasis on strategic investments and commitment to innovation, with gratitude expressed to participants for their engagement.

Financial Performance Highlights
• Date of Call: May 27, 2024
• Fiscal Year End: March 31, 2024
• Key Metrics:
• 16% revenue growth
• 22% increase in EBITDA margin
• 27% rise in profit after tax (PAT) margin
• Volume and Product Shift:
• 9% increase in finished goods volume
• 85% of offerings are now higher-margin machined products
Strategic Developments
• Sector Expansion:
• Entry into the passenger vehicle sector
• Plans to expand machining capacities by 20% in FY25
• Dividend: Recommended final dividend of Rs. 4 per share (15% payout ratio)
• Growth Outlook: Management anticipates 15% to 20% growth in the medium term
Market Insights and Projections
• New Orders:
• Inquiries about FY25 orders in commercial vehicle (CV) and tractor segments
• Anticipated 8.5% CAGR growth from FY24 to FY29
• Expected low single-digit growth in CV sector and 8-10% in farm equipment for FY25
• Market Share:
• Current 38-40% market share in farm equipment, projected increase of 20-25% due to new business with Mahindra & Mahindra
Capacity and Investment Plans
• Capacity Expansion:
• New press lines to support passenger vehicle growth
• Industrial segment share increased to 12%, expected to grow to 30% by FY26
• CAPEX Plans:
• Rs. 250 crores planned for FY25, primarily for a new subsidiary in J&K
• Rs. 277 crores in cash available for potential acquisitions
Export and Revenue Insights
• Export Sales Mix:
• 40%-45% in commercial vehicles, 50%-55% in industrial sector
• 60% of new business from exports, primarily from Europe and North America
• Expected increase in export revenue from 20% to 28%-30% in two years
• Margin Expectations:
• Projected profit margins around 28%
• Revenue and EBITDA improved despite lower tonnage due to higher realization per kg
Conclusion
• Commitment to Growth: Emphasis on domestic growth and adaptation to new standards, with optimism for increased export opportunities.
• Engagement: Management thanked participants for their engagement during the call.

Happy Forgings Limited Q3 FY24 Earnings Call Summary
Call Overview
• Date: February 12, 2024
• Moderator: Aashin Modi, Equirus Securities
• Key Participants: Ashish Garg (Managing Director), Pankaj Kumar Goyal (CFO)
• Format: Listen-only mode with Q&A session
• Importance of audio recording over transcript for discrepancies
Company Background
• Over 40 years of experience in manufacturing complex, safety-critical components
• Transitioned from bicycle pedal arms to second-largest manufacturer of high horsepower diesel engine crankshafts in India
• 85% of revenue from fully machined products
Market Position and Growth
• Strong relationships with top OEMs
• Projected CAGR of 5.1% in global forging and 5% in machining markets by FY29
• Consistent revenue growth: 17% CAGR over the last five years
• Medium-term revenue growth target: 15%-20%
Financial Performance (Q3 FY24)
• Revenue: INR 342 crores (16% increase YoY)
• EBITDA: INR 95 crores (30% increase YoY), EBITDA margin: 27.8%
• Profit After Tax (PAT): INR 58 crores (39% increase YoY), PAT margin: 16.9%
• Nine-month performance: Revenue INR 1,015 crores (17% increase), EBITDA INR 290 crores (25% increase), PAT INR 177 crores (26% increase)
Strategic Focus
• Expansion of product offerings and customer base
• Exports contributing 20% of revenues
• Plans for further investments in forging and machining capacity
Q&A Highlights
• Domestic revenue growth amidst CV sector slowdown: New product introductions and expanding wallet share
• Significant export growth: 70% increase, 30 new clients added
• Plans for North American market expansion and exploration of inorganic growth opportunities
• No significant delays in production capacity ramp-up
• Cash flow management: Annual capex of around INR 200 crores for organic and potential inorganic growth
• Competitive landscape: Strong position in heavy products and crankshafts
Future Outlook
• Anticipated growth in the passenger vehicle market, particularly in the SUV sector
• Ongoing government incentives and scrap sales contributing to revenue
• Commitment to customer satisfaction and optimism about future growth